Emirates fine money transfer firm Wise for lax controls

WISE, the money transfer provider, has been fined by authorities in the United Arab Emirates for failing to abide by its anti-money laundering requirements.

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market hit Wise with a $360,000 (£306,000) fine after finding that Wise Nuqud, a fully owned subsidiary of the fintech company, did not maintain adequate anti-money laundering controls “to ensure full compliance with its obligations” in the country.

It comes as Wise faces mounting scrutiny into the tax affairs of its founder and chief executive Kristo Käärmann, who is being investigated in the UK for deliberately defaulting on a £720,495 tax bill.

The Financial Conduct Authority launched an investigation in July after Mr Käärmann was fined £365,651 by HMRC for failing to heed repeated reminders to pay the tax bill in 2017-18.

The FCA can ban individuals from being senior managers of investment companies. Mr Käärmann owns 19pc of Wise giving him an estimated net worth of at least £946m.

Despite having achieved profitability in 2017 and reporting a 50pc increase in revenues year on year, the fintech’s share price has declined by 50pc since its listing in July 2021.

The FSRA said Wise had failed to verify the source of funds before undertaking transactions on behalf of customers determined to be high-risk.

The review did not identify any instances of actual money laundering as a result.

Wise did not dispute the findings and agreed to settle at the earliest opportunity, which meant that it qualified for a discount of 20pc on the penalty.